Reckitt Disappoints on North American Growth

Reckitt Benckiser Plc said Tuesday second-quarter net revenue growth of 7% was above its full-year target, but it disappointed investors with flat year-on-year growth and lower profits in North America. The UK-based global leader in household cleaning and personal care products also didn’t raise profit expectations for the full year as some expected.

The company, which gets some 29% of its revenue from North America, reported lower profits amid higher marketing costs in the region, and added that it has adjusted activities for the second half to re-establish profitable growth there. Reckitt Benckiser will report results for the six months ended June 30 on Aug. 26.

The company maintained a 4-6% growth target for net revenue and low double-digits in net income this year, both at constant exchange rates, though it also noted that exchange rates were adverse in the half year overall. Offsetting the downside, the company said overall profitability benefitted from further improvement in gross margins due to product mix and savings from cost optimization programs. It also said cash generation remained strong.

Reckitt Benckiser is also in talks to buy UK-based medical and consumer health products company SSL International Plc for GBP560 million.